REVENUE STRATEGY - WAL-MART

What did the giant do when it’s U.S. division eked out only a 1.9% gain in same-store sales—its worst performance ever?
1. Wal-Mart was able to boost total U.S. revenues by 7.2% last year by opening new stores at the rate of nearly one a day. It will trim its customary 8% annual addition to U.S. square footage to 7% in 2007. The company plans to sustain this pace for at least the next five years even though the new Supercenters are just not pulling in enough sales to offset fully the sharply escalating costs of building them. The retailer's pretax return on fixed assets has plunged 40% since 2000.
2. Last year it implemented a whole new supervisory structure that required many of its 27 regional administrators to move out of Bentonville and live in the districts they manage.
3. It launched the overdue store-remodeling program last year

What did the giant do when it felt its focus on volume-over-margin discounts and austerity was weighing down on its margins?
1. Wal-Mart went outside to fill every key slot in building a 40-person marketing group from scratch.
2. It has newly appointed John E. Fleming as its chief merchandising officer.
3. It moved into higher-priced, more fashionable apparel and home furnishings with the splashiest marketing the retailer had ever done, buying ad spreads in Vogue and sponsoring an open-air fashion show in Times Square. The company is sticking with its underlying strategy of moving beyond a monolithic focus on price to try to boost sales by targeting particular customers in new ways.
4. It has also inflated its cost base in expanding far beyond its original rural Southern stronghold. (It is far more expensive to buy land and to build, staff, and operate stores in the large cities that are the final frontier of Wal-Mart's expansion than in the farm towns where it began).

What did the giant do to cope with mounting sociopolitical backlash that was sure to hurt revenue via reputation – lawsuits for allegedly overworking and underpaying employees and sex discrimination class actions; its antiunion stance; and aggressive business practices?
1. It has built a large public and government relations apparatus headed by Leslie A. Dach, a veteran Washington political operative of pronounced liberal bent. The imperatives of reputational damage control have prompted Bentonville to add hundreds of staff jobs in public relations, corporate affairs, and other areas that the company happily ignored when it was shielded by the force field of Walton's folksy charisma.
2. It has struck up effective working relationships with many of the very environmental groups it once disdained.
3. It has added three women (one is Hispanic) and two African American directors to its board and also tied all executive bonuses to diversity goals.
4. Its CEO has embraced environmental sustainability and advocated a hike in the federal minimum wage.

Like anyone else, when a giant begins to see through its mind’s eye, by trial and error, by haste and restraint, it can overcome all its self-doubts

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